Experts: the oil market is approaching a price turning point on a global scale

Crude oil prices have been in a tight range for about a year now, with downside and upside factors (bearish and bullish sentiment) largely balancing each other out. But one major Wall Street player believes the market is nearing the point of a major breakthrough. The only question is, will the breakout be bearish or bullish? OilPrice resource expert Irina Slav writes about this.

In a recent note, Bank of America analysts called the current crude oil situation the Bermuda Triangle due to the region's notoriety as a sort of black hole where ships and planes disappear without a trace. In the case of oil, the surprise effect could be due to concerns about demand from China or expectations of extended OPEC+ production cuts (as the likelihood of quota increases is slim).



In other words, in the global market the situation can change so quickly in any direction that traders now do not even know what is the best course of action, whether to buy futures or sell already purchased options.

BofA's analysis is based on technical indicators that indicate oil is under increasing pressure, comparing the past year or so of oil trading to a tightly wound spring. Sooner or later the spring will release, and according to BofA, that moment is near.

The geopolitical pressures of multiple escalating conflicts in different parts of the world are also taking their toll, with a cumulative effect. This is a difficult time and moment of truth for the expert community. Large companies and traders relying on their opinions expect accurate estimates in order to preserve capital.

As for the opinion of BofA analysts, they tend to foresee a bearish turnaround, that is, they are confident that crude oil will fall below the psychological barrier of $60 per barrel within a few months.